“Understanding Cash Back Credit Cards: How to Earn and Redeem Rewards”

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Understanding Cash Back Credit Cards

At O1ne Mortgage, we prioritize consumer credit and finance education. This post aims to provide an objective view to help you make the best decisions regarding cash back credit cards. For any mortgage service needs, feel free to call us at 213-732-3074.

What Is a Cash Back Credit Card?

A cash back credit card is a type of rewards card that allows you to earn cash on purchases. Unlike travel rewards cards, the value of your rewards with a cash back card is straightforward. However, cash back cards can vary significantly based on the rewards program and specific card features.

How to Earn Cash Back Rewards With Your Credit Card

Cash back rewards cards can be categorized based on their rewards system:

Flat-Rate Cards

With a flat-rate cash back card, you earn the same amount of cash back on every purchase, typically 1.5% or 2%. These cards are ideal for those who prefer simplicity and do not want to manage a complex rewards program.

Bonus Categories or Tiered Rewards Cards

Some cash back cards offer different rewards tiers based on where you use the card. For example, dining cards may offer bonus cash back on restaurant purchases, while gas cards provide extra rewards at gas stations. These cards are beneficial if you spend heavily in specific categories.

Rotating Rewards Cards

Rotating cash back rewards cards feature changing bonus categories, usually every three months. These cards can offer high rewards rates, such as 5% cash back, but often have limits on the amount you can earn in bonus categories each quarter.

How to Redeem Your Cash Back Rewards

You can redeem your cash back rewards in several ways, including:

• A check
• A statement credit
• Direct deposit into your bank account
• Gift cards

Some cards also allow you to use your rewards for travel bookings, charitable donations, or online purchases. Be aware of any minimum balance requirements for redeeming your rewards.

What Credit Score Do You Need for a Cash Back Credit Card?

Many cash back cards require at least fair to good credit, with the best options often needing a very good or excellent score. These cards typically offer large introductory bonuses, high rewards rates, and additional perks. There are also options for those with poor credit, including secured cards, though they may come with higher fees and lower rewards rates.

How to Maximize Cash Back Rewards

To maximize your cash back rewards, consider the following steps:

• Choose the right card based on your spending habits and willingness to manage the rewards program.
• Keep track of your cards’ bonus categories, using notes or stickers as reminders.
• Sign up for limited-time offers to earn extra cash back.
• Review the credit card agreement to understand what purchases qualify for rewards.

If you have the option to choose between cash back and other redemption options, evaluate which provides the best value.

Get Matched With Cash Back Cards

If you’re unsure which cash back card to choose, consider using a card comparison tool to get personalized offers based on your credit profile and preferences. This can help you find the best card to maximize your rewards.

For any mortgage service needs, remember to call O1ne Mortgage at 213-732-3074. We’re here to help you make the best financial decisions.

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